Batelco seeks govt help for new network

Dubai , October 2, 2012

Bahrain Telecommunications Company (Batelco), the kingdom's leading operator, is seeking state support for building a nationwide fibre telecom network, the CEO of the company said on Tuesday.

The network is expected to cost BD40 million ($106.09 million).

The company competes against rival mobile firms Zain and Viva, a unit of Saudi Telecom Co, as well as roughly a dozen internet providers.

The country's fibre network is largely limited to new commercial and residential areas. Fibre allows for higher bandwidth and network speeds, so the government is keen to replace ageing copper infrastructure as part of a national plan.

"Is the government willing to subsidise the plan or are they leaving it to the private sector?" Rashid Abdulla, Batelco chief executive for Bahrain, told reporters on the sidelines of a conference in Dubai.

"It's something that's still under discussion with the government. The budget to cover all of Bahrain, we're talking about something like 40 million dinars. We'd like to see the government contribute to that."

Batelco is also waiting for the telecom regulator to announce how it will sell spectrum for next-generation, long-term evolution (LTE) mobile networks.

"Hopefully by Q1 next year we will have a clearer understanding of the intention of the government," said Abdulla.

"It depends whether it will be a beauty contest or an auction between the three operators. LTE - our network is almost ready, we are talking (of investing) $15-20 million for the next two to three years."

Bahrain's Telecommunications Regulatory Authority expects to issue licenses for LTE, or 4G services, by the first quarter of 2013, it said in an emailed statement to Reuters.

Batelco's Abdulla declined to say how the company would fund its investment in LTE and fixed networks. Batelco owns Jordanian telecoms operator Umniah, 27 percent of Yemeni mobile firm Sabafon, minority stakes in internet providers in Kuwait and Saudi Arabia and is also active in Egypt.

The operator had BD87.4 million of cash and bank balances at June-end, although much of this is thought to be reserved for foreign acquisitions. Batelco is in talks with Cable & Wireless Communications to buy its assets in Monaco and a host of island nations.

Batelco's second-quarter domestic profit fell 20 percent, with prices under pressure as the three operators scrap for customers in a market of about 1.2 million people where mobile penetration is 128 percent.

"Revenue from Bahrain is under a lot of pressure," said Abdulla. "The ARPU (average revenue per user) has deteriorated so much, the market is mature. I think the ARPU drop is beginning to slow down." - Reuters